Saturday, October 13, 2007

A former Qwest Communications International executive, appealing a conviction for insider trading, has alleged that the government withdrew opportunities for contracts worth hundreds of millions of dollars after Qwest refused to participate in an unidentified National Security Agency program that the company thought might be illegal.

Former chief executive Joseph P. Nacchio, convicted in April of 19 counts of insider trading, said the NSA approached Qwest more than six months before the Sept. 11, 2001, attacks, according to court documents unsealed in Denver this week.

Details about the alleged NSA program have been redacted from the documents, but Nacchio's lawyer said last year that the NSA had approached the company about participating in a warrantless surveillance program to gather information about Americans' phone records.

In the court filings disclosed this week, Nacchio suggests that Qwest's refusal to take part in that program led the government to cancel a separate, lucrative contract with the NSA in retribution. He is using the allegation to try to show why his stock sale should not have been considered improper.

Nacchio was convicted for selling shares of Qwest stock in early 2001, just before financial problems caused the company's share price to tumble. He has claimed in court papers that he had been optimistic that Qwest would overcome weak sales because of the expected top-secret contract with the government. Nacchio said he was forbidden to mention the specifics during the trial because of secrecy restrictions, but the judge ruled that the issue was irrelevant to the charges against him.

Nacchio's account, which places the NSA proposal at a meeting on Feb. 27, 2001, suggests that the Bush administration was seeking to enlist telecommunications firms in programs without court oversight before the terrorist attacks on New York and the Pentagon. The Sept. 11 attacks have been cited by the government as the main impetus for its warrantless surveillance efforts.

The allegations could affect the debate on Capitol Hill over whether telecoms sued for disclosing customers' phone records and other data to the government after the Sept. 11 attacks should be given legal immunity, even if they did not have court authorization to do so.

Never mind that it is entirely inappropriate for the government to be awarding a contract conditioned upon an agreement to an illegal program, clearly there is more to this story about the government's relationship with the telecoms than what the administration has admitted to. The fact that the administration was trying to build their warrant-less wiretapping program even before the 9/11 attacks is shocking (though some have suggested so before) and completely discredits their arguments for why they were pursuing it in the first place. It wasn't just that they felt they needed more tools to battle a new enemy, they were interested in expanding executive power (as many of us "paranoid" and "crazy" liberals thought all along).

UPDATE: (Xanthippas) Here's the incomporable Scott Horton with more analysis of the tawdry underpinnings of the prosecution against Nacchio and how it might be related to this warrantless surveillance.

UPDATE II: (Xanthippas) John Conyers, Chairman of the House Judiciary Committee, says that the DOJ and Mike McConnell have some explaining to do.